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ZURICH INSURANCE

UK storms rip into Zurich’s bottom line

Zurich Insurance said on Wednesday that it expected to post a $275-million loss for 2015 largely due to three massive storms that slammed into Britain in December.

UK storms rip into Zurich's bottom line
Photo: Zurich Insurance Group

Switzerland's biggest insurer warned that the impact of the storms Desmond, Eva and Frank meant “large losses” of around $100 million for its general insurance unit in the fourth quarter, and would impact its overall annual results.
   
The company, which is set to announce its results on February 11th, pointed out that the three storms “brought heavy rainfall and caused severe flooding in parts of North England, Scotland and Ireland.”
   
Zurich Insurance stressed that “the nature of many of the losses and the extended remediation period to complete repairs means that the final cost remains uncertain.”
   
The three last months of 2015 were also hit by a range of other natural disasters, including a tornado-like storm that last month lashed Sydney with hail stones as big as golf balls.
   
Zurich Insurance said it expected its results to improve in 2016.
   
It said it aimed to accelerate its so-called efficiency programme and was now targeting more than the previously announced $300 million in cost savings for 2016.
   
But, it acknowledged, the programme would entail $475 million in charges booked on its fourth-quarter balance sheet.
   
And it said it would book a one-time charge of $230 million for the final quarter of 2015 to adjust the value of its German Life business.

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PROFITS

Profits boost makes 2016 ‘a very good year’ for Swiss insurer

Zurich Insurance said on Thursday its profits rose 74 percent in 2016, thanks to fewer claims and progress in its restructuring drive.

Profits boost makes 2016 'a very good year' for Swiss insurer
File photo: Fabrice Coffrini/AFP
Switzerland's largest insurer said in a statement net profit amounted to $3.2 billion (3.0 billion euros) last year, a huge increase over the figure for 2015 when the company was hit by heavy costs linked to the industrial disaster in Tianjin, China.
   
Chief executive Mario Greco, who has been on the job for a year, is leading a reform effort focused on cost-cutting and streamlining the company's operations.
   
“We are well on our way to creating a simpler structure,” Greco said, describing 2016 as “a very good year.”
   
Analysts have, however, voiced doubt about Zurich's ability to reform.
   
Thomas Seidl, an analyst at Bernstein in London, said in a note to clients that he remains “sceptical about Zurich's turnaround plans.”
   
“The track record of past cost-cutting exercises is not strong and the people involved have not changed that much,” Seidl said.
   
Zurich's shares were trading at 281.10 Swiss francs ($282.33), down about one percent, while the overall market was higher.
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